CLA-2 OT:RR:CTF:TCM H008844 ADK
Troy Crago
Atico International USA, Inc.
501 South Andrews Avenue
Fort Lauderdale, FL 33301
RE: Tariff Classification of certain hardware accessories kits
Dear Mr. Crago:
This is in response to your letter dated February 6, 2007, to United States Customs and Border Protection (CBP) in New York, in which you requested a binding ruling pertaining to classification of three hardware accessories kits under the Harmonized Tariff Schedule of the United States (HTSUS). Your letter, along with the samples, was referred to this office for a response.
FACTS:
At issue are three different hardware accessory kits, A, B and C. Kit A, item number C032BA02229, is an 88 piece screw and anchor assortment. It contains 44 self-tapping galvanized carbon steel screws and 44 polypropylene wall anchors of various sizes. The screws and anchors are packaged in a transparent plastic compartmented box. The box is not specifically shaped for its particular contents, nor are the individual compartments labeled. A label on the top of the plastic box features the name “Screw Assortment.”
Kit B, item C032BA02231, is a 410-piece nail assortment. The kit contains galvanized carbon steel nails of 7 different sizes. The nails are packaged with a transparent plastic box, which has 7 different compartments for the nails. The box is not specifically shaped for its particular contents, nor are the individual compartments labeled. A label on the top of the plastic box features the name “Nail Assortment.”
Kit C, item number C032BA02232, is a picture-hanging assortment, containing 103 pieces of hardware. The kit includes 16 hooks of copper-plated carbon steel designed to be attached to the wall, 4 saw tooth edged hanging corners of copper plated carbon steel that are nailed to the picture frame, 20 picture hooks of galvanized carbon steel, 62 nails and wire. The hardware is packaged in a transparent plastic compartmented box. The box is not specifically shaped for its particular contents, nor are the individual compartments labeled. A label on the top of the plastic box features the name “Picture Hanging Kit.”
ISSUE:
What is the proper classification under the HTSUS for the hardware accessories kits?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order. When goods are prima facie classifiable under two or more headings, GRI 3 must be consulted. GRI 3(b), which specifically provides for classification of retail sets, states, in pertinent part:
…goods put up in sets for retail sale…shall be classified as if they consisted of the material or component which gives them their essential character….
At issue is whether the three kits are put up in a set for retail sale. If it is, we must also determine which material or component imparts the essential character. The HTSUS provisions under consideration are as follows:
3924 Tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics:
3924.90 Other:
3924.90.5600 Other
* * *
3926 Other articles of plastics and articles of other materials of headings 3901 to 3914:
3926.90 Other:
3926.90.99 Other….
3926.90.9980 Other
* * *
7317 Nails, tacks, drawing pins, corrugated nails, staples (other than those of heading 8305) and similar articles, of iron or steel, whether or not with heads of other material, but excluding such articles with heads of copper:
Other:
Of one piece of construction:
7317.00.55 Made of round wire….
Other:
Other:
Smooth shank:
Coated, plated or painted:
7317.00.5530 Galvanized
* * *
7318 Screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers (including spring washers) and similar articles, of iron or steel:
Threaded articles:
7318.14 Self-tapping screws:
7318.14.10 Having shanks or threads with a diameter of less than 6mm….
7318.14.1060 Other
* * *
7326 Other articles of iron or steel:
7326.90 Other:
Other:
Other:
7326.90.85 Other….
7326.90.8587 Other
* * *
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the HTSUS at the international level. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80.
The Explanatory Notes to GRI 3(b) indicate, in pertinent part, that "goods put up in sets for retail sale" means goods which:
(a) consist of at least two different articles which are prima facie classifiable in different headings;
(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and
(c) are put up in a manner suitable for sale directly to users without repacking.
Each of the three kits consist of more than two different articles which are prima facie classifiable in different headings. The box for each of the three kits is classifiable as an article of plastic under chapter 39, HTSUS. The metal components, however, are classifiable in both chapters 73, HTSUS.
Furthermore, the merchandise consists of articles put up together to carry out a specific activity. The items are for use in various carpentry projects and are sold together to meet the needs of the carpenter in his or her work. The plastic boxes house various different tools, all of which may be used for specific projects. Kit A contains various sizes of screws and anchors which are also packaged together for the convenience of the user. Kit B contains various sizes of nails which are packaged together for the convenience of the user. Kit C contains all the articles required to hang pictures on a wall.
Finally, the components are put up in a manner suitable for sale directly to users without repacking. When put up for retail sale, the kits are sold as complete units. The boxes are filled with the various hardware components and then labeled with the price, name of the item and barcode. The manner of packaging and text on the outside of the box establishes that it is intended for sale directly to users.
We find that the assortment constitutes a set for tariff purposes. However, in order to classify this merchandise, we must determine that component which imparts the essential character to the set. The term ‘essential character,’ refers to “the attribute which strongly marks or serves to distinguish what an article is; that which is indispensable to the structure, core or condition of the article.” HQ 956538, dated November 29, 1994. Explanatory Note VIII to GRI 3(b) explains, "[t]he factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of the constituent material in relation to the use of the goods." Court decisions on essential character for GRI 3(b) purposes have looked primarily to the role of the constituent material in relation to the use of the good. See Better Home Plastics Corp. v. U.S., 915 F. Supp. 1265 (CIT 1996), aff'd 119 F. 3d 969 (Fed. Cir. 1997); Mita Copystar America, Inc. v. U.S., 966 F. Supp. 1245 (CIT 1997), rehear'g denied, 994 F. Supp. 393 (1998); Vista Int'l Packing Co. v. U.S., 890 F. Supp. 1095 (CIT 1995). See also Pillowtex Corp. v. U.S., 893 F. Supp. 188 (CIT 1997), aff'd 171 F. 3d 1370 (Fed. Cir. 1999); Avenues in Leather, Inc. v. U.S., 2004 Ct. Int'l Trade LEXIS 39, aff'd 423 F.3d 1326 (Fed. Cir. 2005); HQ 968226, dated August 8, 2006
In Headquarters Ruling (HQ) 083712, dated May 18, 1989, CBP addressed the issue of hardware caddy sets. With respect to essential character, we determined that the plastic organizer imparted the essential character to the assortment. It greatly facilitated the storage of numerous fasteners in various compartments where they could be clearly and quickly identified for use. In that case, the organizer was a plastic cabinet measuring approximately 7-1/2 inches by 9-1/2 inches by 5-1/4 inches with 16 individual removable drawers. Unlike the subject boxes, the plastic cabinet was not disposable.
Subsequent decisions on hardware caddy sets have relied on the above ruling in making essential character determinations. In HQ H005081, dated March 8, 2007, CBP classified the Nut and Bolt Storehouse. The Nut and Bolt Storehouse was sold as a set which included 40 heavy-duty polypropylene bins which were ready to permanently mount to a wall, plastic mounting rails, and over 1000 pieces of fasteners. Each heavy-duty bin was individually labeled with the size and type of hardware it carried. In relationship to the rest of the merchandise, the bins served the most important role. They “greatly [facilitated] the storage of numerous fasteners in various compartments where they [could] be clearly and quickly identified for use” in order to meet the needs of the carpenter in his or her work. Furthermore, the bins were individually labeled which allowed for easy selection of the appropriate fastener or hardware component. As a result, CBP determined that the bins imparted the essential character to the set.
The plastic boxes in the present matter are distinguishable from those previously considered by CBP. Unlike the 40 polypropylene bins in HQ H005081, the subject boxes are not intended for re-use. After retail sale, the polypropylene bins were to be fastened to a wall for permanent use as a hardware receptacle. Similarly, the fully formed plastic cabinet in HQ 083712 was intended for re-use. The subject plastic boxes, on the other hand, are disposable. Furthermore, the subject boxes are not individually labeled. In HQ H005081, the bins imparted the essential character because the labeling allowed for easy selection of the appropriate hardware component. In the present matter, the user must
instead identify the appropriate item by means of visual inspection. In relationship to the rest of the merchandise, these disposable plastic bins do not serve the most important role.
As a result, the plastic boxes do not impart the essential character to Kits A, B or C. The kits will therefore be classified as if they consisted only of the individual hardware component that imparts the essential character.
We will first consider Kit B, the Nail Assortment. This set is comprised only of the disposable plastic box and the seven different sizes of nails. These nails, therefore, impart the essential character to the set. As a result, Kit B will be classified as if it consisted only of the nails. CBP has uniformly classified nails such as this under heading 7317, HTSUS, which provides for nails. See HQ 555583, dated May 22, 1990 (Classification of iron nails under heading 7317, HTSUS), and New York Ruling Letter (NY) 868503, dated November 11, 1991 (classification of steel nails under heading 7317, HTSUS).
We next consider the classification of Kit C, the Picture Hanging Kit, which contains various steel hardware components, including hanging hooks, hanging corners, picture hooks, nail and wire. The essential character is imparted by the carbonized steel picture hooks. These hooks serve the most important role in the set because they allow the pictures to be attached to the wall. All other component pieces are subsidiary to the hooks. Kit C will therefore be classified as if it consisted only of the picture hooks. CBP has previously considered classification of such hooks. In NY L80918, dated December 2, 2004, steel picture hooks were classified under subheading 7326.90.8587, HTSUSA, as “other articles of iron or steel.” See NY F85027, dated April 17, 2000 (Classification of picture hooks under heading 7326, HTSUS); NY K87846, dated July 27, 2004 (A picture hanger assortment was found to be classifiable under heading 7326, HTSUS); NY J86859, dated September 16, 2003, (A frame hanging kit was classified under heading 7326, HTSUS); and NY I81790, dated May 21, 2002 (Classification of a picture hanger kit under heading 7326, HTSUS). Consistent with CBP precedent, the Kit C will be classified under heading 7326, HTSUS
Finally, we consider Kit A, the Screw Assortment. After reviewing your request, it has come to our attention that certain published rulings need to be reconsidered so that we do not have in force rulings that may be inconsistent with our current views. We intend to initiate a notice and comment procedure pursuant to 19 U.S.C. 1625(c) to revoke or modify one or more rulings. In this manner we believe we can best meet our obligations regarding the sound administration of the HTSUS and other customs and related laws. See 19 C.F.R. 177.7(a). As a consequence, we cannot address the classification of Kit A at this time.
We invite you to comment on the relevant proposed modification or revocation, which we will publish soon in an issue of the Customs Bulletin, available at www.cbp.gov. The notice and comment procedure typically takes 60 days from the date of publication of the proposed change before a final modified or revoked ruling is published and, other than as provided in 19 C.F.R. 177.12(e), 60 additional days before the change becomes
effective. On publication of the final ruling, if you still wish you may resubmit your request for a prospective ruling to CBP, National Commodity Specialist Division, One Penn Plaza, 10th Floor, New York, NY 10119.
HOLDING:
By application of GRI 3(b), Kit B, item C032BA02231, is classifiable under heading 7317, HTSUS. Specifically, it is classifiable under subheading 7317.00.5530, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for “Nails, tacks, drawing pins, corrugated nails, staples (other than those of heading 8305) and similar articles, of iron or steel, whether or not with heads of other material, but excluding such articles with heads of copper: Other: Of one piece of construction: Made of round wire: Other: Other: Smooth shank: Galvanized.” The 2007 general, column one rate of duty is free.
By application of GRI 3(b), Kit C, item number C032BA02232, is classifiable under heading 7326, HTSUS. Specifically, it is classifiable under subheading 7326.90.8587, HTSUSA, which provides for “Other articles of iron or steel: Other: Other: Other: Other: Other.” The 2007 general, column one rate of duty is 2.9 percent ad valorem.
Sincerely,
Gail A. Hamill, Chief
Tariff Classification and Marking Branch